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European shares fall from 2-year high; miners slip

Published 11/10/2010, 07:33 AM
Updated 11/10/2010, 07:40 AM
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* FTSEurofirst 300 index down 0.1 percent

* Miners slip on China import data

* Delhaize gains on forecast-beating Q3 results

By Brian Gorman

LONDON, Nov 10 (Reuters) - European shares nudged down on Wednesday from two-year highs as euro zone debt worries hurt sentiment and weak Chinese import data took a toll on miners.

Generally stronger corporate earnings reports helped limit losses on key indexes.

At 1206 GMT, the pan-European FTSEurofirst 300 of top shares was down 0.1 percent at 1,115.68 points after Tuesday's highest close since September 2008.

The European benchmark is up more than 72 percent from a record low in March 2009, with several major economies having emerged from recession, helped by stimulus from governments and central banks worldwide. Shares of Natixis fell 8.3 percent after the French bank's third-quarter profit misses forecasts.

But most earnings have beaten forecasts in the reporting season and Belgian supermarket group Delhaize was one of the latest, up 5.3 percent after its results.

"There might be a bit of weakness until we get some resolution about Ireland," said Mark Bon, fund manager at Canada Life in London. "The market is looking for a Greek solution to the Irish problems, which would remove uncertainty.

"But I don't think it will be enough to upset the market. We're still in the reporting season, which is very strong. The market is still looking good value."

CHINA SYNDROME

Euro zone peripheral countries such as Ireland and Portugal have set out plans to cut their budget deficits but are struggling to convince markets they will work.

Portugal sold 1.24 billion euros ($1.71 billion) in 6- and 10-year bonds on Wednesday, near the top of the initially indicated offer, with yields rising on both after a secondary market sell-off of Irish and Portuguese bonds.

Commodity stocks slipped from strong gains in the previous session after China's copper imports fell to their lowest for a year and oil shipments slumped 30 percent.

The data, combined with a stronger dollar, saw copper prices slip from near-record highs, and other metals fell. Miners Lonmin, Antofagasta, Rio Tinto and Xstrata were down 2.1 to 3.1 percent.

Other China news hurting market sentiment included sources saying the central bank had increased reserves requirements for its biggest banks in a bid to curb inflation.

"Growth in China imports has slowed, that will be a bit of a concern for the market," Heino Ruland, strategist at Ruland Research in Frankfurt, said.

ING SEES DOUBLE

ING rose 3.6 percent on plans for a double IPO for its insurance activities, which could allow the Dutch financial services group to raise more money than in a single IPO. The company posted higher third-quarter profit.

German consumer goods group Henkel gained 8.5 percent after the maker of Persil detergents raised its 2010 outlook and adjusted third-quarter EBIT beat expectations.

Utilities were higher. Scottish and Southern Energy rose 4.3 percent after saying it would raise its dividend this year.

Germany's E.ON, the world's largest utility, rose 4.4 percent after promising minimum dividends for two years, though it reported a loss for the third quarter.

RWE, which reports on Thursday, rose 2.1 percent on talk the company may raise its outlook.

UniCredit SpA lost 1.8 percent, after third quarter net profit at Italy's biggest bank fell short of forecasts, leaving its prospects uncertain.

Across Europe, the FTSE 100, Germany's DAX and France's CAC 40 fell between 0.4 and 0.6 percent. U.S. data due later includes weekly jobless claims, brought forward from Thursday because of the Veterans Day holiday, although stock exchanges will open as usual.

($1=.7256 Euro)

(Additional reporting by Joanne Frearson; Editing by David Hulmes)

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